SRP, APS meeting high demand

Valley heat pushes power use to near-record levels

by Ryan Randazzo - Aug. 26, 2011 12:00 AMThe Arizona Republic

This week, major Arizona utilities came close to breaking records for energy demand that have stood for five years, but the heavy load is not spurring any interruptions in service or warnings to conserve power.

Both Arizona Public Service Co. and Salt River Project said they have ample energy to sell to their customers. Nearly all of the power plants and transmission lines that send energy to Phoenix from across the Southwest are in operation, in a week that featured official highs of 114 on Tuesday, 114 on Wednesday and 113 on Thursday.

That has not been the case in Texas, where a heat wave and several power-plant shutdowns have prompted the state's primary power-grid operator to ask people to cut back on energy use this month, narrowly avoiding rolling blackouts.

When it gets hot like this week, Arizona homes and businesses use more electricity to operate air-conditioners. Even though high temperatures are on pace to set a record for August, APS and SRP were about 357 megawatts shy Wednesday of the record 13,826 megawatts their customers required at once on July 21, 2006. That day, the mercury hit 118 degrees in Phoenix.

One megawatt of capacity at a power plant is enough electricity to power about 250 homes at once in Arizona.

With cloudy afternoons in the forecast, and summer waning, it's unlikely that the utilities will set a power-use record this year.

"It looks like that will be our summer peak," said John Lucas, APS director of power operations.

Every year, utilities strategize and plan to meet that one moment in summer when temperatures spike, air-conditioners crank away and energy demand peaks. Their reputation rests on their reliability.

Before the recession, APS and SRP commonly set records for peak power demand in the summer, usually at about 5 p.m. on the hottest weekday of summer.

But that hasn't happened in five years as population growth has slowed, weather has not been extreme and customers have conserved amid the recession.

Without any major power-plant shutdowns or substation fires, like one in 2004 that forced weeks of energy conservation in the Phoenix area, the region mostly has had a reliable power supply.

A substation fire June 30 cut off about 150,000 SRP customers for most of the afternoon and evening, but once power was restored, nobody was asked to conserve energy to protect the grid. SRP also had several power plants falter in February, and about 65,000 customers were briefly cut off from power that morning.

"There wasn't anything too unusual about meeting load (Wednesday)," said Steve Hulet, manager of supply and trading for SRP. "We have a considerable amount of capacity reserve with all of our (power plant) units available."

The utilities keep reserve power plants ready to be switched on at a moment's notice in case demand tops their forecasts.

Operators for each utility work to balance the amount of electricity coming into their power grids with the amount of power being used at that moment by their customers.

Lucas, standing in the Phoenix Energy Control Center that APS uses to balance the energy grid, said the utility had about 50 individual generators at various power plants that can be ramped up or down depending on the situation.

The power demand for the APS service territory being displayed in the room at noon on Thursday was 5,900 megawatts, nearly double that of a normal day in winter, but nowhere near a summer record, thanks to an overcast, hazy morning that kept temperatures down.

"Our system is designed to handle a transmission line or power plant that trips out," he said. "And we anticipate hot weather. You know that is coming. And we forecast (power demand) for growth."

On July 21, the record day in 2006, SRP's demand was 6,590 megawatts and APS' was 7,236 megawatts.

On Wednesday, they both came close to those records when their combined load hit 13,469 megawatts.

Neither APS nor SRP has enough power plants to meet their summer demand alone, and both rely on power imported from other utilities across the West. The higher the temperatures get, the more power they must purchase for their customers.

They pass those costs directly to customers on their monthly bills.

"Prices in the purchase market over peak were quite reasonable, in the $40 to $55 per megawatt-hour range," Hulet said.

By comparison, Texas utilities have seen prices get as high as their cap of $3,000 per megawatt-hour this month on record demand days because there aren't enough power plants up and running to meet the demand. Texas businesses and consumers eventually will pay back those high costs in their utility bills.

While most Arizona customers will have higher bills from running their air-conditioners this month to cope with the heat, the warm weather is helping out the finances at APS and SRP. The more of their own generated power they sell, the more revenue they bring in.

Both utilities had weak earnings early this year because of mild weather.

Economic growth also is a factor in how well a utility fares financially.

"Weather is one of the key drivers of energy sales, but there are other drivers such as economic activity and customer growth," said Aidan McSheffrey, SRP's general manager of finance.

"If everything runs as expected, this (hot weather) generally helps the bottom line. However, we will need to see the full impact of this hot August weather once we get through the entire summer. For SRP, residential sales were lower than expected through the first half of the summer. And this was primarily driven by weather (lower-than-average temperatures)."